According to information posted by the Toronto Stock Exchange (TSX), almost all sectors that make up the market are up over the past ten years. Industrials, financials, telecoms and utilites are all clearly up. The loser among the various sectors is health care.
I strive for a diversified portfolio. I am wondering if it is time to invest in health care? A ten year losing streak is not one to be ignored and yet such a run of bad luck must come to an end at some point. I believe it is time to take a look at some health care ETFs.
- The BMO Equal Weight US Healthcare Index ETF (CAD-Hedged) (TSE:ZUH) offers exposure to 73 of the largest US-listed healthcare stocks in an equal-weighted ETF.
- The iShares Global Healthcare Index ETF (CAD-Hedged) (TSE:XHC) is composed of 114 of the largest global healthcare companies.
- The Vanguard Health Care Index Fund ETF (NYSE:VHT) wraps 407 of the largest US-listed healthcare and biotech stocks from all three major sub-sectors: pharmaceuticals, medical equipment and biotechs. If you are not put off by currency risk, it is worth a look. Note, this is an NYSE listed ETF.
- The TD Global Healthcare Leaders Index ETF (TSE:TDOC) contains 156 of the top global healthcare stocks. For personal reasons, I lean toward the TD offering. With the TDOC relatively low MER of 0.38%, teamed with the largest yield (2.19%) of the group, plus very good reviews posted by other more knowledgeable investors, I am drawn to this ETF.
Check out the chart posted below. TDOC is comfortably on the plus side of the ledger over the past year. In fact, at the time this chart was created, TDOC (green) was the best performer of the four health care ETFs I charted.
The Vanguard ETF VHT (red) is not a clear standout, I am not interested in owning it since it must be bought on the NYSE and I like to steer clear of currency exchange complexities.
ZHU seems to have staked out a claim to the bottom of the chart. I am looking for reasons to eliminate ETFs from consideration. The ZHU performance over the past year has dropped it from my consideration at this time.
As the iShares offering XHC (blue) has done quite nicely, I find myself favouring the idea of investing in two health care ETFs: TDOC and XHC. If I should decide to go with just one, I'll go with TDOC. As a retiree, I need the dividend income.
